March 23, 2021 | Washington Examiner

Biden’s Persian Gulf policy benefits China

March 23, 2021 | Washington Examiner

Biden’s Persian Gulf policy benefits China

The Biden administration has put Washington’s Arab allies in the Persian Gulf on notice. Since Jan. 20, the White House has made several decisions that have harmed those allies and strengthened Tehran’s position in the region. A longer-term beneficiary will be China.

The Biden administration came to office with the promise of returning to the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action, which most Arab states and Israel oppose. They see Tehran gaining substantial economic opportunities from the JCPOA without having to dismantle its nuclear program or curb its regional ambitions.

The new administration quickly suspended the sale of weapons to the United Arab Emirates and Saudi Arabia. Another big move was to halt support for the Saudi-led coalition in Yemen fighting the Tehran-backed Houthi insurgents. Formally known as Ansar-Allah, the Houthis are an armed Zaidi (Shiite) Islamist group with deep roots in the northern part of Yemen that overran Sanaa in 2014, expelling the internationally recognized government and setting the stage for civil war.

Finally, Washington announced it would remove the Houthis from the State Department’s Foreign Terrorist Organizations list, to which the Trump administration added them just days before its departure. The decision reinforces the perception that Washington is moving toward acceptance of a Houthi-governed, Iran-dominated Yemen.

Across the region, the regime in Tehran is creating a Khomeinist Shiite confederation, posing a direct threat to conservative Arab monarchies, which have traditionally been aligned with the United States.

Former President Barack Obama’s policy of detente with Iran intended to stabilize the region enough to allow Washington to pivot from the Middle East to Asia and the China question. In reality, detente only allowed Tehran to grow stronger. By the time Obama left office, Iran was the most powerful foreign force in four Arab capitals in the region: Beirut, Damascus, Baghdad, and Sanaa. A return to detente will fortify the clerical regime’s ambitions. After consolidating its power in Yemen and further increasing its control in Lebanon, Syria, and Iraq, Tehran may target Arab countries in the Persian Gulf with significant Shiite populations. That includes Bahrain, Kuwait, and Saudi Arabia itself. Since the bloodbath and victory in Syria, Iran’s revolutionary message has become more explicitly Shiite.

Also, unintentionally, Obama’s pursuit of detente gave birth to Arab-Israeli rapprochement, which the Trump administration encouraged. However, it is not clear whether Israel can or wants to help the Persian Gulf monarchies turn the regional tide against Tehran. For example, in Syria, Israel has been targeting Iranian assets, but the monarchies have lost their proxy war. It is unlikely that the Arab-Israeli rapprochement will save Yemen from Tehran and its proxies. If the U.S. does not want to help and Israel lacks the capacity and volition, where can these monarchies find new allies?

China is the top trade partner of the countries in the region and imports almost half of its oil from the Persian Gulf. Over the last 25 years, trade between China and most Persian Gulf countries has grown to the point at which it exceeds the latter’s trade with the U.S. This economic dynamic, sooner or later, will change the military and political dynamic of alliances and partnerships. However, President Biden’s distancing from Saudi Arabia and the UAE may expedite that process.

China depends on Persian Gulf oil. Over the past 25 years, according to the World Bank and China’s General Administration of Customs, both the value of China’s oil imports and the Persian Gulf countries’ share of the Chinese market have grown exponentially. In 2020, China imported $176 billion of crude oil, $82.6 billion of which was from the Persian Gulf. From 2010 to 2020, on average, Persian Gulf countries provided almost half of China’s oil imports.

Tehran’s expansionist policy can threaten the security of China’s energy resources by creating chaos, but China’s influence with the Islamic Republic in Iran is significant. Beijing is Tehran’s No. 1 trade partner, and many Chinese companies are active in Iran’s infrastructure projects. The Islamic Republic, still zealously opposed to the U.S., is eager to be a prominent member of the China-dominated global order Beijing hopes to build.

However, Iran is not China’s key economic partner in the region; the Saudis and Emiratis are. Iraq is emerging as an important source of oil for Beijing, and Tehran’s growing influence over Baghdad may counterbalance the Sunni bloc’s economic ties with China. But for now, the Persian Gulf’s Arab kingdoms have the stronger hand with China.

The Biden administration’s reversal of its predecessor’s Persian Gulf policy, the isolationist mood in the U.S., and the demand to bring the troops home, combined with the Arab states’ decreasing economic ties to the U.S. and increasing trade and investment with China, all offer Beijing an opportunity to fill a void. Nevertheless, with this opportunity comes the challenge of a region cursed by sectarian conflicts.

The Obama administration justified its retreat from the Middle East with the need to pivot to Asia. The Biden administration seems to be on the same path. However, the retreat from the Persian Gulf may give a boost to China’s global ascendance.

Saeed Ghasseminejad is a senior Iran and financial economics adviser at the Foundation for Defense of Democracies, where he also contributes to FDD’s Center on Economic and Financial Power. Follow Saeed on Twitter @SGhasseminejad. FDD is a nonpartisan think tank focused on foreign policy and national security issues. 

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China Gulf States Iran Iran Global Threat Network Iran Politics and Economy